Hugo Boss, the well-known German fashion house, has surpassed expectations with its impressive growth in fourth-quarter sales. This outstanding performance can be attributed to the strong demand received at its recently renovated stores and the growth of its online retail platform. Adjusted for currency changes, the fourth-quarter sales reached 825 million euros ($915.34 million), surpassing the average forecast of 805 million euros made by analysts.
After experiencing a decline of over a quarter in its shares throughout the past year, Hugo Boss saw a 2.4% increase in premarket trade following this positive news. The operating profit for the quarter also rose by 9% to 122 million euros, indicating the brand’s positive performance. This recovery compensates for the profit decline witnessed in the first nine months of the year.
Hugo Boss had previously revised down its 2019 earnings outlook due to weak demand in the United States and Hong Kong. However, they predicted a turnaround in the fourth quarter, and it seems that their prediction has come true. The fashion house acknowledges the challenging environment in Hong Kong but was able to offset it with double-digit growth in mainland China. In the Americas, sales fell by 7% (currency-adjusted), an improvement from the 8% drop in the third quarter.
The success in sales growth can be attributed to Hugo Boss’ efforts in reinventing its stores, including its flagship location on Champs Elysees in Paris. The retail business reported a 7% rise in currency-adjusted sales, while online sales saw an impressive 52% jump.
This positive performance aligns with the trend seen in other luxury goods makers, who also experienced a surge in their shares last week. UBS predicts that 2020 will be another busy year for the sector, driven by optimistic consumer sentiment and speculation surrounding mergers and acquisitions.
Hugo Boss has proven its resilience in a challenging market by capturing the attention of shoppers through its revamped stores and strong online presence. With its positive sales growth and the promising outlook for the luxury goods sector, the brand has positioned itself for continued success in the years to come.